DOL releases final rules on paid sick leave for federal contractors

The U.S. Department of Labor recently released its final rule requiring federal contractors and subcontractors to provide their employees with at least seven days of paid sick leave each year. The final rules were published on Friday, Sept. 30 and will go into effect 60 days after publication (Nov. 29, 2016). Despite the “effective date,” the sick leave rule will only apply to federal contractors and subcontractors entering into new contracts where the solicitation was issued or the federal contract was awarded on or after Jan. 1, 2017.

The new rule further is limited to contracts or subcontracts that are:

Covered by the Service Contract Act or the Davis-Bacon Act

Concessions contracts

Service contracts in connection with federal property or lands

When the rule takes effect, covered federal contractors and subcontractors will be required to provide at least one hour of paid sick leave for every 30 hours of work on or in connection with a covered federal contract or subcontract. Employees may accrue up to 56 hours of paid sick leave per year. Employers, for ease of administration, are permitted to count all hours (not just hours worked on covered federal contracts or subcontracts) for purposes of paid sick leave accrual.

Employees may use paid sick leave for:

Their own physical or mental illness or other healthcare needs, including preventive care

Caring for a family member (or someone whose close association with the employee is the equivalent of a family relationship), including preventive care

To address the consequences of domestic violence, sexual assault, or stalking involving the employee or a family member, which can include time required to pursue legal action or seek relocation services

Employees may carry over up to 56 hours of paid sick leave per year. Further, paid sick leave must be reinstated for employees rehired by a covered federal contractor or subcontractor within 12 months after a job separation.

Employees may use paid sick leave in increments of one hour or more. Employers may permit use of paid sick leave in smaller increments, but they are not required to do so. When the need for leave is foreseeable, an employee must give the contractor notice at least seven calendar days in advance. When the need for leave is not foreseeable, an employee is still required to provide notice as soon as practicable. An employee also may be required to provide certification issued by a health care provider for a paid sick leave absence of three or more consecutive workdays. Unless the employee consents or disclosure is required by law, a contractor is obligated to keep any information learned in a certification confidential.

Federal contractors cannot make leave contingent on employees finding a replacement to cover their work.

Retaliation for use of paid sick leave is prohibited by the final rules. A violation of the rule may carry stiff consequences, including the full range of remedies available to Office of Federal Contract Compliance Programs (OFCCP), including debarment from future contracting.

The new rule is a floor, not a ceiling. It does not supersede any local, state or federal law—or collective bargaining agreement—that offers greater leave rights.

Given the limited application, what long-term impact the new rule will have on federal contractors and subcontractors and their employees remains unknown. Federal contractors and subcontractors should examine their contracts to determine if the new rules apply to them. Then, they should evaluate whether their existing paid leave policies are adequate or if modifications are required.

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